If you itemize rather than take the standard deduction, your choice of tax software can greatly influence the amount you'll get back (or owe) the IRS. Pitting H&R Block against TurboTax, for example, I saved almost $1,000. Here's how they compare.

Background: H&R Block and TurboTax

Both H&R Block and TurboTax offer online wizards (or downloadable software, if you prefer) to help you prepare your federal and state taxes and e-file them; you can try both services out for free before paying to file your return. They also both have different tiers depending on how complicated your taxes are, from the free editions for the simplest tax returns, to more involved investor and business editions.

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This faceoff compares the self-employed editions of these two tools (people who have to file the Schedule C form often need the most tax guidance). In particular, we'll compare H&R Block's Best of Both product with TurboTax's Home & Business.

Showdown: Pricing and Unique Selling Points

H&R Block: Review and Filing from an Actual Tax Pro, plus Free Audit Support. I've used H&R Block's unique Best of Both service ($79.95 plus $39.95 for state filing) for the last few years because I usually have a fairly complicated return (investments, freelance income, mortgage, etc.). The Best of Both service combines the convenience and control of preparing your return from home, but at the end sends your return to an H&R Block tax preparer for review—and his/her signature. The added peace of mind this brings has been worth the negligible difference in cost for me (Best of Both is only $5 more than the Premium version designed for those who are self-employed or have rental income, though it's a significant $30 more than the Deluxe version designed for homeowners/investors). H&R Block also exclusively offers free audit support and representation from an enrolled agent in the event you get audited by the IRS.

TurboTax: Community Support and Great Reputation. TurboTax was the best selling tax software last year and garnered the most positive press reviews the year before that. TurboTax also has an excellent, active community where you can get your tax questions answered, and personalized phone support is also available (for a fee: $29.95 for the first 20 minutes). Like TurboTax's other editions, you can add audit support/representation to the Home & Business edition (which costs $99.95 plus $39.95 for state filing) for an additional $39.95 fee.

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Winner: H&R Block. H&R Block is $20 less expensive and comes with the review and signature from the tax agent as well as free audit representation, for which TurboTax charges extra. If you don't have to have an agent review your return and aren't concerned about possibly getting audited, though, TurboTax's great reputation may sway you to spend a little more when filing with them.

The Goal for Both: The Lowest Tax Liability

Of course, whatever your tax preparation method, the bottom line is that there's pretty much one goal in mind when it comes to filing your taxes: to maximize your refund or at least have a tax liability as close to $0 as possible. In an ideal world, you would have had all the required taxes taken out of your paycheck (or estimated tax payments) throughout the year, and filing your $0 return would be a breeze. (Side note: although getting a big refund can be a pleasant surprise, most financial advice recommends having as close to no tax liability and no refund as possible, because a tax refund is money you could have had in your savings account earlier.)

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Like other online tax preparation tools, both TurboTax and H&R Block promise to maximize your refund and do it very easily, with guarantees on the accuracy of their software's calculations and a refund on your file prep costs if you get a larger refund or smaller liability with another method. H&R Block's fine print on the maximum refund guarantee is very telling, though:

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If you find another tax software/online preparation method that results in a larger refund (or smaller liability) than that calculated by H&R Block At Home tax software/online program, we will refund the fees you paid us to use our tax software/online program to prepare that return. To qualify, the larger refund or smaller tax liability must not be due to difference in data supplied by you or positions taken on your return that are contrary to law. [emphasis added]

Because the wizards vary greatly between all tax prep software—with some more thorough or emphasizing more types of deductions or credits than others—if you itemize your deductions, it's very possible you won't enter the same data in each software tool. And that's where your possible savings lie.

Showdown: The Tax Wizard

Both H&R Block and TurboTax offer step-by-step information entry, asking you questions much as a tax preparer might. The difference is in which questions they ask you and how well they do it.

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Tax forms import: You might be able to import information from your payroll provider or broker with these tools, saving you time and increasing accuracy. In my case, only TurboTax imported my W-2, because my employer's payroll provider was registered with Intuit. H&R Block, because they had my tax forms from previous years, imported basic information I had previously saved very easily, however.

Wizard versus topic-based input:

When you begin, H&R Block immediately throws you into its wizard, which is pretty straightforward but very linear. If you want to jump around or access specific topics, you can ask the software later to take you to them, but you have to go through the wizard first.

TurboTax, similarly, offers both a wizard that guides you through the data entry process and a topic-specific index—but it gives you the option upfront of either choice. The TurboTax topics view is also more thorough than H&R Block's — it shows you at a glance the amounts recorded so far for each topic (blanked out in the image here).

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Wizard correctness: When I first finished my return with H&R Block, I had about a $1500 refund due to me for both federal and state combined. Whew! I sent my return off for review and waited to be able to e-file it. After several days of not hearing from the agent, however, I contacted her and she told me there were errors in my return (not caught by the tax software's built-in error check): I had claimed the home office mortgage deduction twice, so now I owed more than $1500. Perhaps this was user error on my part, but I would not have knowingly entered the information more than once and the fact that it was so easy for me to do so without being caught by the software was alarming. The tax agent scanned my return again to see if there was any way of reducing my tax liability further, but she didn't find any. Frustrated, I turned to TurboTax.

Wizard thoroughness: Hands down, TurboTax asked me better questions about my finances last year, which resulted in a lower tax liability in the end. For my home office deduction, for example, TurboTax prompted me to include my home insurance costs, something I had missed or not seen in H&R Block's wizard. This, too, may have been user error on my part, and somewhere surely H&R Block has that line item in their software, but the reason why we're using this software is so we can enter all possible deductions, credits and other tax-related information as easily as possible—without having to hunt it down ourselves.

Winner: TurboTax. There were more deductions from TurboTax, even compared to H&R Block's one-two punch of an online system and review from a professional tax preparer. I (or the software) made fewer errors with TurboTax.

Showdown: Support and Tax Guidance

H&R Block: Chat, Messaging System, and FAQs. With the Best of Both service, you get unlimited tax support via chat, although I found that to reach my assigned tax preparer I had to use H&R Block's messaging system, and there was sometimes a delay of as much as a couple of days to hear back from the preparer.

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A side panel offers convenient FAQs on the topic that you're working on in H&R Block, but the answers are often terse.

TurboTax: Chat, Community, and Fee-Based Phone Support. TurboTax offers live chat support between 8 and 5 PST, as well as the above-mentioned community forums and phone support, but there's no personalized email support.

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Topic-related FAQs bring up the Live Community answers, which often feel more relevant than cookie-cutter answers.

Winner: Neither. It's hard to decide this one. H&R Block's signature and review by a tax pro is the most like actually going to a tax preparer, though the response time when you ask your preparer a question may vary and could be improved. TurboTax's community answers are great, but for the price you pay it would be nice to have email support.

Bottom Line

In the end, TurboTax's additional, or perhaps more user-friendly, prompts reduced my federal tax liability by almost $700 and increased my state refund by over $200. It was frustrating and time-consuming to enter my tax information again in a different program, but the result was worth it—and if you itemize your deductions, you might find comparing the results in more than one program valuable as well.

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I should probably try another tax software, but, as easy as these online tools are, preparing your own taxes can be exhausting. Next year I'm probably going to start preparing my taxes online as usual and then take them to a professional—for comparison, of course.

Note: as I am not a tax professional or financial advisor, please keep in mind that this comparison highlights my results only and is not intended as advice that would replace information from your tax advisor. Your results from these or other programs will vary depending on your particular situation.

Do you have a similar tax prep story you'd like to share or thoughts on a specific service? Let us know in the comments!